Google-Groupon deal could start ‘wave’ of acquisitions

Google-Groupon deal could start ‘wave’ of acquisitions

Google’s rumored $6 billion acquisition of Chicago online discount service Groupon would send shockwaves through the high-tech and bargain Web site industries, experts say.

That price tag is extraordinary for a company founded in 2008, said Michael Greeley, general partner at Flybridge Capital Partners. The top 15 tech companies – including Google, Cisco, Microsoft and Apple – have been sitting on about $300 billion in cash while merger and acquisition deal making slowed, Greeley said. But the potential Groupon deal could set off a chain reaction.

“We may see a wave of really interesting acquisitions,” he said.

Bill Yucatonis, CEO of Needham-based Groupon competitor CoupMe, said he doesn’t expect a Google-owned Groupon to monopolize the growing industry.

“It justifies the industry and legitimizes what we do,” Yucatonis said. “It doesn’t scare me at all.”

But while he sees room for competition, Yucatonis said the market is cluttered with about 1,000 deal-a-day Web sites, leading to consumer fatigue.

“It’s just not sustainable,” he said.

In the meantime, the 20-employee, New England-focused CoupMe is offering neighborhood deals – such as at Rubin’s Kosher Restaurant in Coolidge Corner – and launching two new business lines, the parenting-focused CoupMom and GoodTwo, next week.

GoodTwo will be for nonprofit groups to offer deals, with CoupMe taking a cut.

Google’s possible Groupon purchase may not have come at a good time for the Mountain View, Calif.-based search giant. Yesterday, European Union regulators announced they’re investigating Google for violating antitrust laws.

In July, Google announced plans to buy Cambridge-based ITA Software, which makes back-end software for online travel Web sites. That purchase is being reviewed by regulators, and online travel companies including Kayak, Travelocity and Expedia have formed a group called to oppose the deal.

Leave a Reply

Your email address will not be published. Required fields are marked *